Houston-based venture capital firm South Loop Ventures has officially closed its $21 million Fund I, with backing from major players including Rice Management Company and Chevron Technology Ventures. Launched in 2022, the firm is focused on early-stage startups—particularly those led by underrepresented founders—with a typical check size of $400,000.
Founder and managing director Zach Ellis describes the fund as generalist in nature, but with a strong lean toward sectors tied to Houston’s industrial roots. That includes healthcare, energy, space, and climate tech—areas where Ellis believes Houston offers both infrastructure and opportunity. Additional investors in the fund include Texas Capital Bank and The Great Commission Foundation of the Episcopal Diocese of Texas.
So far, South Loop Ventures has invested in 13 startups and is aiming for a portfolio of at least 30 companies. More than just numbers, though, Ellis sees the firm’s mission as part of a larger movement to reshape access in venture capital.
“Houston is one of the most diverse cities in the country, and we thought it was important to have a fund here that truly reflects that,” Ellis said. “We believe diverse teams present a real opportunity for strong returns.”
He’s also undeterred by the current anti-DEI sentiment circulating in some political spaces. His stance is firm: access to venture capital should be inclusive, and South Loop Ventures exists to close that gap.
A Mission-Driven Path to Venture Capital
Ellis’s journey into VC is anything but conventional. A New Orleans native, he began his career in the Navy, where he served for seven years. That mission-driven mindset stayed with him as he transitioned into healthcare consulting and later corporate innovation—where he was first introduced to the intersection of technology and business.
“I was amazed that people got paid to solve real-world problems with tech,” he recalled. A colleague then pointed him toward venture capital, leading him to a corporate venture role at PepsiCo. There, he scouted tech, built partnerships, and invested in food and ag-tech funds. He later joined Ohio State’s investment team, managing capital directed toward Midwest startups and university spinouts.
But in 2020, amid the pandemic and the racial justice reckoning sparked by George Floyd’s death, Ellis began to re-evaluate his role in VC. He noticed how often he was the only person of color in the room and decided it was time to build something more inclusive.
Then came a pivotal phone call from a friend in Houston. The city, Ellis was told, was hungry for innovation—and for a fund led by someone who could champion diverse founders. That conversation planted the seed for what would become South Loop Ventures.
Building the fund, however, was no easy feat. Ellis admits the fundraising environment was tough, especially as markets cooled. “We had strong momentum at the start, but the process took 24 months,” he said. Key connections, like those from Mercury Fund, helped him meet aligned investors and navigate the Texas VC ecosystem.
Now that the fund is fully closed, Ellis is focused on the future—attracting top-tier talent to Houston and putting capital into the hands of founders who are often overlooked by traditional VC.
“Houston has so much to offer—it’s affordable, it’s diverse, and people want to live here,” he said. “We’re building a home where bold, diverse founders can feel welcome, empowered, and supported.”
